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BusinessSaule Omarova, Biden’s Pick for Key Banking Regulator, Backs...

Saule Omarova, Biden’s Pick for Key Banking Regulator, Backs Out

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Saule Omarova, a Cornell Law School professor whom critics painted as a communist after President Biden picked her for a key banking regulator job, is withdrawing from consideration for the post.

In a letter to the White House on Tuesday, Ms. Omarova said it was “no longer tenable” for her to seek the position of comptroller of the currency. Mr. Biden, who called Ms. Omarova a strong advocate for consumers and a “staunch defender” of the financial system, accepted her request.

“Saule would have brought invaluable insight and perspective to our important work on behalf of the American people,” he said in a statement. “But unfortunately, from the very beginning of her nomination, Saule was subjected to inappropriate personal attacks that were far beyond the pale.”

Ms. Omarova, who grew up in the former Soviet Union, faced months of criticism from Republicans and bank lobbyists who cast her as a threat to the American economy.

Bank lobbyists began to oppose Ms. Omarova almost as soon as her nomination was announced. They said that she wanted to replace the banking industry’s functions with services provided by the Federal Reserve, pointing to a 2020 paper that Ms. Omarova wrote about ways the Fed could use its own digital currency, which central bankers had already begun to consider creating.

As comptroller, Ms. Omarova would have overseen the Office of the Comptroller of the Currency, the agency that regulates the country’s largest banks, with a staff of nearly 3,500 employees. She would have had to coordinate with bank regulators at the Federal Reserve, but would not have had the authority to make changes to the banking system’s structure.

Some lobbyists, including the incoming chairman of a group resenting community bankers and the chief executive of another group that focuses on big banks, also shared a Wall Street Journal editorial suggesting that Ms. Omarova’s Soviet childhood meant that she could not be trusted.

Republicans in Congress soon took the same approach, claiming that both her academic work and her Soviet origins should disqualify her. In an exchange that drew gasps from Democrats during Ms. Omarova’s hearing before the Senate Banking Committee on Nov. 18, Senator John Kennedy, a Louisiana Republican, demanded to know whether Ms. Omarova had ever resigned from a communist youth group that Soviet children were forced to join, adding, “I don’t know whether to call you professor or comrade.”

But Republican opposition would not have mattered had all 50 Senate Democrats been in favor of Ms. Omarova’s candidacy. Her nomination was ultimately doomed by a lack of support from moderate Democrats. At the hearing, Jon Tester of Montana and Mark Warner of Virginia both said they had serious concerns about her candidacy.

Sherrod Brown of Ohio, the Democrat who leads the Senate Banking Committee, said in a statement on Wednesday that he was disappointed.

“Dr. Omarova is one of the most qualified nominees ever for this job because of her experience as a policymaker, in the private sector, and in academia,” he said.

Powerful interests had “distorted” Ms. Omarova’s views, Mr. Brown added.

“In a relentless smear campaign reminiscent of red scare McCarthyism, they have shamefully attacked her family, her heritage, and her commitment to American ideals,” he said.



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